Bias: The outlook for AUD/FJD is bullish-to-range-bound, as it currently stands above the 90-day average and in the upper half of the 3-month range.
Key drivers:
• Rate gap: The Reserve Bank of Australia is considering potential rate hikes due to rising inflation risks, while the Reserve Bank of Fiji has maintained a stable approach, affecting interest in both currencies.
• Risk/commodities: Recent softer-than-expected inflation data in China highlights concerns about demand for Australian exports, which may influence the AUD negatively if continued.
• One macro factor: The upcoming Australian Consumer Price Index release on January 7 could provide further direction for the AUD, depending on inflation trends.
Range: The AUD/FJD pair is likely to drift within its recent range, with minor fluctuations as influenced by local and international economic developments.
What could change it:
• Upside risk: A surprise increase in the Australian CPI could boost the AUD's performance against the FJD.
• Downside risk: Continued weakness in China's economic indicators could diminish demand for Australian exports, putting pressure on the AUD.